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Key Takeaways
- Use the data you collect through your daily activities as a broker or agent to find the right investment property for you.
- Your experience as an investor will help you attract investor clients.
- Real estate can be less volatile and more resilient to changes than other assets.
As a real estate professional, you’ve already made a significant commitment of time and money to become a licensed expert in your field. You are intimately involved in the day-to-day complexities of your local real estate market and this, in and of itself, gives you a leg up on the competition when it comes to investment properties.
Even if you are experiencing more traditional success working with clients to buy and sell real estate, you can still increase your income and net value by investing in properties of your own. The fact is you’re much better positioned than the average person to earn substantial returns on your investment simply because of your depth of knowledge. Take advantage of the experience you already have and build your own portfolio.
Grow Your Skillset
A good real estate investor will always seek out a knowledgeable real estate pro to scout new properties—in this case, that good broker is you. Not only will you attract more clients as an investor yourself because they can see that you “put your money where your mouth is,” but you won’t need a secondary party to close your own investment deals. Saving thousands of dollars on fees and commissions can quickly increase your return on investment.
Insider Knowledge
Your greatest tool is your familiarity with the local real estate market. You already understand the trends and fluctuations in the area in which you’ll be investing, and you have knowledge of what property types and amenities are the most desirable to renters. For you, the meticulous research process that goes into finding the right investment property is already done—you have obtained all the data you need through your daily activities as a broker or agent. This means you can move quickly and make the wisest decision on which properties will yield the greatest return.
Expanding Your Network
You’ve already spent precious time building your professional network, and you can rely on this network to help you find the right investment opportunities. You likely have multiple existing connections you can leverage for assistance with financing, early access to investment properties, or legal matters. Your inside knowledge combined with the expertise of your connections can ultimately lead to an investment strategy that will earn you consistent profits.
Tax Season Savings
In addition to the savings you’ll find on commission and fees from acting as your own broker, investing in a rental property may also see some significant tax savings. Real estate professionals are typically not subject to passive loss rules, which limit the amount of losses an investor can deduct from their income. Losses are common for property investors because they can deduct depreciation, a non-cash expense only used for tax purposes. This is an additional expense for investors similar to property taxes, interest, and insurance. Because most brokers meet criteria set by the IRS, passive loss limits may not apply, allowing you to offset your regular income and minimize taxes.
Planning For the Future
Most brokers don’t have traditional retirement plans like pensions or 401k matches, which means the time to start planning for the future is now. A long-term rental property can be a great way to earn passive income, both to save for retirement and to continue earning after retirement. Compared to other assets, real estate can be less volatile and more resilient to changes, and it also appreciates at a similar rate, or better, when compared to other common retirement assets. Purchasing a property and paying it off is a great way to save for retirement, and you can reinvest the passive income you’ll earn from your investment property.
As a real estate pro, you are uniquely qualified to find success as an investor. You already have the education, knowledge, and experience in place to not only know a great deal when you see one but to make the deal happen.
